Over the years, I’ve met with lots of founders and companies. Some have built great businesses and are looking for their strategic exit; others are just getting started and hoping to improve the odds of a good outcome. They’re in different places, but they’re dealing with common questions about how to drive success.
Here are seven factors that, if properly considered, will help to drive your company’s success.
DON’T COMPETE ON “PRICE”.
This is your opportunity to differentiate on something customers value – something other than price. Trust me – just don’t go there. If you choose to compete on price, you’ll lose the war with folks like Amazon or Wal-Mart who lead from a place of unmatched scale and resources. Be better, not cheaper.
FOCUS ON LARGE MARKETS.
Big opportunities exist when you solve problems for lots of people. Big markets have subsets and demographics that you can win even if you miss a segment. When you miss in a small market, you miss. It is hard building a company so set yourself up for success by going after a big market. Play big.
Think about it: One million people paying you one dollar is better than a $100,000 contract from a big company. Less concentration and a much more believable story that you’ll find the next set of thousand customers versus landing another whale of a contract.
YOUR FIRST CUSTOMERS ARE YOUR BEST SALESMEN.
If your product/service/offering is great (see Seth Godin’s Purple Cow), your early customers become your marketing and sales machine. Thrill your customers, and then ask them to shout their excitement for your product/service/offering from the rooftops. Excited, happy, vocal, social customers create a special value that’s hard to beat.
RUN LEAN. STAY FLEXIBLE.
Companies that succeed are great at navigating turbulence and change. And not everything you do will go right. Let the market tell you where the opportunities are, and then be nimble and agile enough to shift in order to pursue them. Conservative investors, expensive office rents, big teams and fixed costs make shifting almost impossible. Run lean. Stay flexible.
FIGHT HARD TO BUILD A BRAND.
When we started to build Mountain Khakis, we wanted people to walk into stores and ask the store’s staff, “do you carry Mountain Khakis?” versus “Do you sell outdoor pants?” We wanted brand power and recognition for a couple reasons. First, strong brands can charge a premium. Secondly, strong brands can survive slow markets. Lastly, and most importantly, strong brands win. So, we worked hard to build the imagery, the marketing and the products that constantly reinforced the brand.
MAKE CUSTOMER SERVICE AND CUSTOMER EXPERIENCE GREAT.
I received in the mail yesterday a product that I backed on Kickstarter several weeks ago. When I opened the box, there was a small piece of the new product that had come un-glued. I decided it wasn’t a big deal, and I moved on. An hour later, the CEO emailed me personally, and she said there was an issue with the early batch. She wanted me (among all her customers) to love my/their new standing desk, so she was sending a new one overnight. I said that wasn’t necessary, but she insisted. That’s WOW. Is that harder? Sure. Was it a great move to make as the CEO? 100%. I’m a customer for life now. Well done, team X-Stand!
GET THE VERY BEST PEOPLE.
There is no single factor that will determine the outcome of your business more than people – your co-founders, co-pilots, employees, partners, investors. Be relentless in your pursuit of great people. Hire slow. Fire fast. Your success will correlate almost 100% to the average of your people.
Startup success is hard. But when you break it down to the core components, there are a few that will move the needle more than others.
For more advice, tools and strategies on scaling startups visit: maclackey.com